Commercial Real Estate in Montara: Midcoast C-1 Zoning, Coastal Permits and Utility Capacity

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Montara is an unincorporated village on the San Mateo County coast, and its commercial property is a short list: a few business parcels near Highway 1, mixed-use buildings, small lodging and visitor uses, and agricultural or open land on the edges of town. Every one of them is governed by San Mateo County and the County’s Local Coastal Program, not by a city, so confirm the zoning, coastal permit history and utility service for each parcel with County Planning and Building before relying on this page.

Who controls the parcel

There is no City of Montara. San Mateo County Planning and Building applies Title 8 of the County code, and because Montara lies in the Coastal Zone, it also applies the County’s Local Coastal Program (LCP). The Board of Supervisors and the Coastal Commission approved that program in late 1980, and the County began issuing coastal development permits itself in April 1981. The current edition of the policies carries amendments through September 14, 2021.

The LCP’s policy document does three things that shape Montara specifically:

• Urban designation. Policy 1.4 names Montara, along with Moss Beach, El Granada, Princeton and Miramar, as an urban area inside the urban/rural boundary, which is where the LCP wants new development to go.
• Community plan. Policy 1.5 folds the Montara-Moss Beach-El Granada Community Plan into the Midcoast land use plan.
• Rural pockets. Policy 1.14 treats four old Montara subdivisions, the First, Second, Hotel and Wienke Additions, as rural residential areas rather than urban ones.

Water and sewer come from the Montara Water and Sanitary District (MWSD), an independent special district that also manages the garbage franchise. So a Montara commercial deal usually involves three agencies: the County for zoning and permits, the Coastal Commission on appeal and for LCP amendments, and MWSD for service.

Montara zoning for commercial, industrial and mixed use

The County lists its districts in Chapter 8.08. The districts below are the ones a Montara business buyer is most likely to meet; the County’s zoning map, not this table, decides which applies to a given parcel.

What a Montara C-1 parcel can do

By right. The C-1 chapter permits a broad neighborhood list: bakeries, banks, barber and beauty shops, bars, restaurants, offices, theaters, pet grooming and similar shops. Gas stations are allowed for sales and minor service only.

Use permit. Hotels and motor courts, hospitals and clinics, mortuaries, used goods and vehicle sales, garden supply, small-animal veterinary hospitals and any residential use require a use permit. The chapter lists bed-and-breakfast inns as a use-permit use only outside the Coastal Zone, so a Montara B&B idea needs a careful read of the County’s coastal rules before an offer.

Housing in a commercial building. Ordinance 4556, adopted in May 2011 with the Midcoast LCP update, says dwellings in the Midcoast project area must sit above the first floor and may not exceed the commercial floor area. The exception is extra area built as very low, low or moderate income housing under a County contract.

Site limits. Front yards are not required, but a C-1 lot next to a residential district needs a 3-foot side yard and a 6-foot rear yard. Low impervious surfaces are capped at 10% of the parcel unless a professional drainage plan supports an exception. Site grading is generally barred from October 15 to April 15 unless erosion controls are in place.

Coastal permits, utility capacity and the Midcoast unit cap

Coastal development permits. Under the LCP, development in the Coastal Zone needs a coastal development permit or an exemption, and must meet LCP policies as well as zoning, building and health rules. Expect a change of use, an addition or new signage to start with that question.

Water and sewer. MWSD’s FAQ describes a system of nine active wells, a surface water treatment plant and three groundwater treatment plants, with about 1,658 active water connections and roughly 25 miles of sewer line. The district had a long moratorium on new connections, which it repealed after it was cleared to serve new connections in 2013. Sewage is pumped through an intertie pipeline to a treatment plant in Half Moon Bay. LCP Policy 1.19 ties new public water connections to MWSD’s Public Works Plan, limits new private wells inside the MWSD area, and requires a deed restriction to hook up later when a well is allowed.

The old Montara treatment plant. LCP Policy 2.18 lets MWSD reuse its former plant site for wet-weather storage, pumping and recycled water, and requires public pedestrian access on the seaward side of the site.

Mixed-use housing and the cap. Any project that adds a dwelling unit, including the apartment over a shop, counts against the urban Midcoast limit of 40 new units a year in LCP Policy 1.23. The County’s cap and waitlist page, last updated October 27, 2026, says 102 units were permitted in 2025, which leaves 18 building permits for 2026 and 2027 together. The County says it cannot accept new residential building permit applications until January 1, 2028, or until an LCP amendment providing relief is approved. Planning applications are still processed, and approved projects join a waitlist in order of approval date.

The Coastal Commission has scheduled a hearing on amendment LCP-2-SMC-26-0048-1, which would revise how the annual cap is calculated, for November 4, 2026. The outcome was not known when this page was reviewed, and the County notes the Commission may extend its deadline rather than act.

Transfer tax, business tax and property tax

The San Mateo County Assessor-County Clerk-Recorder collects documentary transfer tax at recording at 55 cents per $500 of value, under Revenue and Taxation Code section 11911 and County Ordinance 2.93. Montara is unincorporated, so no city transfer tax applies. Hotel and short-term rental operators in unincorporated areas register for transient occupancy tax through the County’s contractor. A sale generally triggers Proposition 13 reassessment. We did not verify an unincorporated County business license tax.

Due diligence that matters in Montara

Start with our commercial due diligence checklist, then add:

• Confirm the base district and combining districts with the County, and whether the parcel sits in one of the four rural residential additions.
• Pull the coastal development permit and any use permit for the current use.
• Ask MWSD for the parcel’s existing water and sewer connections and capacity before planning any change of use.
• If a residential unit is part of the plan, check its place on the Midcoast waitlist and do not underwrite it until a building permit can issue.
• Check whether the property is on a well and what the LCP requires about a future public hookup.
• Budget for winter grading limits and drainage plans on any site work.

Questions people ask

Sources & notes

1. San Mateo County, Local Coastal Program
2. San Mateo County LCP policies (2021 edition)
3. Title 8, Chapter 8.08 districts (GoCodebook)
4. Title 8, Chapter 8.68 C-1
5. Title 8, Chapter 8.154 S-17 Midcoast
6. Title 8, Chapter 8.106 PAD
7. Montara Water and Sanitary District, FAQ
8. San Mateo County, urban Midcoast building permit cap and waitlist
9. San Mateo County ACRE, documentary transfer tax
10. San Mateo County, transient occupancy tax

Note: We did not confirm which parcels in Montara carry C-1 or other commercial zoning; use the County’s zoning map. The Coastal Commission’s November 4, 2026 decision was pending at review.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

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